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sroberts on PROD1PC70 with NOTICES

68548

Federal Register /

Vol. 71, No. 227 / Monday, November 27, 2006 / Notices

Act. Therefore, in accordance with section 702(b) of the Act, we are initiating countervailing duty investigations to determine whether manufacturers, producers, or exporters of CFS in the PRC, Indonesia, and Korea receive countervailable subsidies. For a discussion of evidence supporting our initiation determination, see PRC CVD Initiation Checklist, Indonesia CVD Initiation Checklist, and Korea CVD Initiation Checklist.

We are including in our investigations the following programs alleged in the petitions to have provided countervailable subsidies to producers and exporters of the subject merchandise in the PRC, Indonesia, and Korea:

  • I.

    The PRC

    • A.

      Grant Programs

    • B.

      Policy Loans

UncreditworthinessPetitioner has provided a reasonable basis to believe or suspect that, in accordance with

    • 351.505

      (a)(6) of the Departments regulations, that Shandong Chenming Paper Holdings Ltd. was uncreditworthy in 2004 and 2005 and Ningxia Meili Paper Industry Co., Ltd. was uncreditworthy from 2003 through 2005. See Memorandum from Susan Kuhbach, Director, to Stephen J. Claeys, Deputy Assistant Secretary regarding Initiation of Countervailing Duty Investigation: Coated Free Sheet Paper from the Peoples Republic of China; Shandong Chenming and Ningxia Meili Uncreditworthiness Allegation (November 20, 2006).

  • C.

    Preferential Tax Programs for Encouraged Industries Including the Paper Industry

    • 1.

      Tax Incentives for Foreign Investment Enterprises (FIEs)

    • 2.

      Tax & Tariff Incentives for Select Industries

  • D.

    The ‘‘Two Free, Three Half’’ Program

  • E.

    Income Tax Exemptions Program for FIEs Located in Certain Geographic Locations

  • F.

    Local income tax exemption and reduction program for ‘‘productive’’ FIEs

  • G.

    Income tax exemption program for export-oriented FIEs

  • H.

    Corporate Income Tax Refund Program for Reinvestment of Fie Profits in Export- oriented Enterprises

  • I.

    Debt-to-equity Infusion for APP China

Equity Infusion/Debt-for-Equity Swap- Petitioner has provided a reasonable basis to believe or suspect that, in accordance with section 351.507(a)(7) of the Departments regulations, Asia Pulp and Papers (APPs) subsidiary, APP China, was equityworthiness from March 2001 through the year of the debt-to- equity swap. See PRC CVD Initiation Checklist.

  • J.

    Subsidies to Input Suppliers

    • 1.

      Preferential Tax Policies for FIEs Engaged in Forestry and Established in Remote Underdeveloped Areas

    • 2.

      Preferential Tax Policies for Enterprises Engaged in Forestry

      • 3.

        Special Fund for Projects for the Protection of Natural Forestry

      • 4.

        Compensation Fund for Forestry Ecological Benefits

  • II.

    Indonesia

    • A.

      Provision of Standing Timber For Less Than Adequate Remuneration

    • B.

      Government Ban on Log Exports

    • C.

      Subsidized Funding for Reforestation (Hutan Tanaman Industria or HTI Program)

      • 1.

        ‘‘Zero-Interest’’ Rate Loans

      • 2.

        ‘‘Commercial Rate’’ LoansPetitioner has provided a reasonable basis to believe or suspect that, in accordance with 351.505(a)(6) of the Departments regulations, that Asia Pulp & Paper (APP), a member of the Sinar Mas Group (SMG) and a cross-owned supplier of logs to PT. Pabrik Kertas Tjiwi Kimia Tbk. (TK) has been uncreditworthy since

      • 2001.

        See Indonesia CVD Initiation Checklist.

  • III.

    Korea

Industry-Wide Programs

  • A.

    Preferential Lending by the KDB and Other GOK Authorities

  • B.

    Export Industry Facility Loans (‘‘EIFLs’’)

  • C.

    Reduction in Taxes for Operating in Regional and National Industrial Complexes

  • D.

    Funding for Technology Development and Recycling Program

  • E.

    Export and Import Credit Financing from the Export-Import Bank of Korea

  • F.

    Sale of Pulp for less than Adequate Remuneration

  • G.

    Sale of Pulp from Raw Material Reserve for less than Adequate Remuneration

  • H.

    Duty Drawback on Non-physically Incorporated Items and Excess Loss Rates

  • I.

    Direction of Credit

  • J.

    Tax Programs under Restriction of Special Taxation Act (RSTA)

    • 1.

      RSTA Article 71

    • 2.

      RSTA Article 60

    • 3.

      RSTA Article 632

Company-Specific Programs

  • A.

    Shinho Paper (Shinho)-GOK-Led Bailouts in 1998, 2000, and 2002

    • 1.

      Equity InfusionPetitioner has provided a reasonable basis to believe or suspect that, in accordance with 351.507(a)(7) of the Departments regulations, that Shinho was unequityworthy in 1998, 2000, and 2002, the years in which the government-provided equity infusions were provided. See Korea CVD Initiation Checklist.

    • 2.

      Extension of Debt Maturities and Reduction or Elimination of Interest Obligations

    • 3.

      Debt Forgiveness

    • 4.

      New LoansPetitioner has provided a reasonable basis to believe or suspect that, in accordance with 351.505(a)(6) of the Departments regulations, that Shinho was uncreditworthy from 1998 through 2005. See Korea CVD Initiation Checklist.

  • B.

    Kye Sung Paper (Kye Sung)-GOK-Led Bailout of Subsidiary in 2004

Equity Infusion/Debt-for-Equity SwapPetitioner has provided a reasonable

basis to believe or suspect that, in accordance with sections 351.505(a)(6) and 351.507(a)(7) of the Departments regulations, Poongman Paper, Kye Sungs CFS producing affiliate, was uncreditworthy and unequityworthy in 2004, the year in which the debt-for- equity swapped occurred. See Korea CVD Initiation Checklist.

We are not including in our investigation the following programs alleged to benefit producers and exporters of the subject merchandise in the PRC, Indonesia, and Korea:

I. The PRC Currency Manipulation

Petitioner alleges that the GOC- maintained exchange rate effectively prevents the appreciation of the Chinese currency (RMB) against the U.S. dollar. Therefore, when producers in the PRC sell their dollars at official foreign exchange banks, as required by law, the producers receive more RMB than they otherwise would if the value of the RMB were set by market mechanisms.

Petitioner has not sufficiently alleged the elements necessary for the imposition of a countervailing duty and did not support the allegation with reasonably available information. Therefore, we do not plan to investigate the currency manipulation program.

II. Indonesia Accelerated Depreciation Program

We are not including in our investigation the Accelerated Depreciation program alleged to benefit producers and exporters of the subject merchandise in Indonesia. Petitioner alleges that this program allows a few select industries with high fixed capital costs to significantly accelerate the depreciation of their capital assets, creating a tax advantage for capital intensive industries, such as the paper production industry. The Department, however, has recently determined that the Accelerated Depreciation program is not countervailable because it is non- specific, in accordance with section 771(5A) of the Act. See Final Affirmative Countervailing Duty Determination: Certain Lined Paper Products from Indonesia, 71 FR 47174 (August 16, 2006), and accompanying Issues and Decision Memorandum at 10. Although petitioner argues that the Department should reconsider its determination of non-countervailability, no new information or evidence of changed circumstances was provided to warrant reconsideration of our finding of non-specificity.

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